Cash Crop

The term is used to differentiate from subsistence crops, which are those fed to the producer's own livestock or grown as food for the producer's family. In earlier times cash crops were usually only a small (but vital) part of a farm's total yield, while today, especially in the developed countries, almost all crops are mainly grown for cash. In non-developed nations, cash crops are usually crops which attract demand in more developed nations, and hence have some export value.

In many tropical and subtropical areas, jute, coffee, cocoa, sugar cane, bananas, oranges and cotton are common cash crops. In cooler areas, grain crops, oil-yielding crops and some vegetables and herbs are predominate; an example of this is the United States, where corn, wheat, soybean are the predominant cash crops. Coca, poppies and cannabis are other popular black-market cash crops, the prevalence of which varies. In the United States cannabis is considered by some to be the most valuable cash crop.

Prices for major cash crops are set in commodity markets with global scope, with some local variation (called basis) based on freight costs and local supply and demand balance. A consequence of this is that a nation, region, or individual producer relying on such a crop may suffer low prices should a bumper crop elsewhere lead to excess supply on the global markets. This system is criticized by traditional farmers. Coffee is a major part of this.

Issues involving subsidies and trade barriers on such crops have become controversial in discussions of globalization. Many developing nations take the position that the current international trade system is unfair because it has caused tariffs to be lowered in industrial goods while allowing for low tariffs and agricultural subsidies for agricultural goods. This makes it difficult for a developing nation to export its goods overseas, and...